BSNL seeks Rs 8,600 cr bailout over 2 yrs

State-run telecom giant Bharat Sanchar Nigam Limited (BSNL) has knocked at the governments doors for a Rs 8,600 crore bailout spread...

State-run telecom giant Bharat Sanchar Nigam Limited (BSNL) has knocked at the governments doors for a Rs 8,600 crore bailout spread over the next two years and an extension of moratorium on interest payment of government loans worth Rs 7,000 crore. Besides these,the monolith which still has a networth of Rs 88,634 crore,has asked the Prime Ministers Office to direct all central and state governments to mandatorily subscribe to its services.

In a recent meeting with officials in the Prime Ministers Office (PMO),senior BSNL executives highlighted the companys poor finances caused by dwindling revenues from the landline business,progressive removal of concessions and rising salary bills. Falling landline connections alone have impaired its finances by Rs 3,500 crore during 2007-08 and 2008-09. Currently,BSNL has a lions share of 76.23 per cent or 28.45 million subscribers in the wireline business.

The PSU has sought either exemption or reimbursement of licence fee and spectrum charges besides making good its losses on the telegraph business. Progressive removal of concessions provided to the PSU like reimbursement of licence and spectrum charges paid and withdrawal of Access Deficit Charge (ADC) to compensate for unviable wire line network has adversely impacted the companys financial performance during the past three years, the official said.

The BSNL brass also pointed out that providing fixed telephone lines in rural and un-remunerative markets of urban areas caused a deficit of nearly Rs 4,000 crore per annum. They also said that the decision to restrict procurement of equipment from Chinese suppliers last year could also impact their performance and sought flexibility in procurement process like their private counterparts to reduce time delays and improve upon the quality of service.

If BSNLs demands for extending interest moratorium on loans,reimbursing licence and spectrum charges were made,it would gain about Rs 2,700 crore. The balance deficit,a direct support of Rs 4,300 crore per annum was imperative at least initially for the next two years, the official said. The PSUs salary bill has further compounded its woes. The recent revision of wages of its 2.97 lakh staff has added another Rs 2,600 crore to the bill.